2012 Edelman Trust Barometer: Executive Summary

2012Edelman Trust Barometer Executive Summary

1

2012 Trust Barometer: Business Can Earn the License to Lead

The 2012 Edelman Trust Barometer sees an unprec-edented nine-point global decline in trust in government. In twelve countries,

it trails business, media, and non-governmental organizations as the least trusted institution. This has pushed more countries into the dis-truster category (figure 1). Political brinksmanship on the debt ceiling in the United States, dysfunction on bailouts in the European Union, corruption in Brazil and India, and a natural disaster in Japan drove the downward trend.

Business leaders should not be cheered by government’s inepti-tude, especially as trust in the two institutions tends to move in sync. There is still a yawning trust gap for business, as evidenced by one half of the informed public respondents (49%) saying government does not regulate business enough. Yet what most stakeholders want from government – consumer protec-tion (31%) and regulation ensuring responsible corporate behavior (25%) – are actions business can take on its own.

It makes good business sense for business to broaden its definition of leadership. It cannot be seen as acting solely in self interest, but rather must execute on both the fundamentals of profit and societal good. To earn the license to lead, business must do the following:

* The Wall Street Journal, January 13, 2012

In 2008-2009, in the wake of a recession that saw large, global companies such as Lehman Brothers and AIG collapse, trust in business imploded. Government stepped in with bailouts and new regulations. But in 2011, government became paralyzed by the politics of extremism and endless haggling – and the public lost confidence.

Exercise principles-based leadership instead of rules-based strategy. Business should not go to the edge of what is legally permissible but rather stay focused on what is beneficial both to shareholders and society.

Recognize that the operational factors responsible for current trust in business won’t build future trust. Our research shows that current trust lev-els are built on consistent financial returns, top management, and innovative products. However, engagement-oriented behaviors that are more societal in nature, such as treating employees well, putting customers ahead of prof-its, and transparency, are vital to building future trust (see pages 9 and 10).

Practice radical transparency. Speak first to employees – whose credibility rose dramatically (page 7) – enabling them to drive the continuing conversation with their peers. Establish operational and societal goals and report on them regularly.

Shape the public discourse on issues like fracking and charging fees for financial services. Explain the advantages for customers. Business must exhibit its role as job creators, managers of responsible supply chains, and community partners that help build infrastructure.

Business is a force for good. Yes, there are risks in bold decision-making, in telling hard truths, and in structuring business goals that serve investors and society. But the bigger risk for business is in waiting for government to act; some business leaders are clearly aware of that fact. In the Wall Street Journal, Paul Polman, CEO of Unilever (disclosure: Edelman client) recently said: “Our version of capitalism has reached its sell-by date. Never has the opportunity for business to help shape a more equitable future been so great.”*

THE DYNAMIC OFTRUST BETWEEN

BUSINESS &GOVERNMENT

Business leadersmore trusted than

government leadersbusiness has advantage

in 24 out of 25 markets

Business hasflexibility and speed

Call forincreased regulationprotection from irresponsible behavior sought

Government responds

Dwindling trustin governmentpolicy paralysis

BUSINESS:CAN EARN LICENSE TO LEAD

2011

2008-2009

Low trust in business and CEOs

22012 | Trust Barometer

Figure 1: Biggest decline in trust in government in Barometer historyHow much do you trust government to do what is right?

Figure 2: Distrust is growing: more countries are now distrusters

Responses 6-9 only on 1-9 scale; 9 highest; Informed Publics ages 25-64

Responses 6-9 only on 1-9 scale; 9 highest; Informed Publics ages 25-64Composite score is an average of a country’s trust in business, government, NGOs and media

Throughout the world, people blamed their governments – more than any other institution – for the financial and political crises they endured in 2011. In seventeen of the 25 countries surveyed, government is now trusted by less than half to do what is right (figure 1). In Eu-rope, trust in government dropped by more than ten points in France, Spain, and Italy. In Latin America, Brazil experi-enced a 53-point plunge. In Asia, South Korea and China suffered declines of 17 and 13 points, respectively. In Japan, trust in government dropped by 26 points driven by the catastrophic earth-quake that struck the country in early spring. (For more on Japan and the domino effect of the government’s poor response to the disaster, see page 5.)

Trust in government did hold steady in a number of countries. Germa-ny, though well below the midpoint, stayed firm at 33 percent, while India cleared the midway mark (53 percent) for the first time. In the United States, trust remained stable despite all the political discourse. Singapore regis-tered the third-highest government trust level at 73 percent. Trust saw a significant increase in Ireland, where elections brought in a new government.

Government’s inability to effectively manage the political and financial cri-ses of 2011 also had a severe impact on the credibility of government of-ficials. Not surprisingly, their decline mirrored the historic drop in trust in the institution of government. In near-ly every country surveyed, the general population says it trusts government leaders less to tell the truth than it does business leaders (figure 4, page 3). Their credibility has taken such a beating that they are now the least trusted spokespeople in the world. (For more on the steep decline in credibility levels of government offi-cials see page 7.)

Government Suffers Steepest Trust Decline in Barometer History

The majority of countries surveyed do not trust their government to do what is right

50%52%

43%

-Trust+Trust-TrustGLOBAL

Trust Steady

N/A N/A

20%

35%

44%

53%56%

43%

33%

62%64%

77%73%

43%

38%

52%

47%

42%

35%

88%

78%

88%

75%

39%

26%

42%

28%

45%

31%

75%

61%

50%

33%

49%

31%

54%

36%

62%

40%43%

20%

51%

25%

85%

62%

49%

32%33%

40%

52%

COUNTRIES

2011 2012

GLOBAL

2011 2012

Brazil 80GLOBAL 55

UAE 78

Indonesia 74

China 73

Netherlands 73

Mexico 69

Singapore 67

Argentina 62

India 56

Italy 56

Canada 55

South Korea 53

Sweden 52

Japan 51

Australia 51

Spain 51

France 50

Poland 49

Germany 44

U.S. 42

U.K. 40

Russia 40

Ireland 39

China 76GLOBAL 51

UAE 68

Singapore 67

India 65

Indonesia 63

Mexico 63

Netherlands 61

Canada 58

Italy 56

Argentina 54

Australia 53

Brazil 51

Sweden 49

U.S. 49

South Korea 44

Poland 44

U.K. 41

Ireland 41

France 40

Germany 39

Spain 37

Japan 34

Russia 32

TRUSTERS

NEUTRAL

DISTRUSTERS

2011 2012

3

Business Still Has Its Own Hurdles to Clear, Especially in Developed Markets

Despite better standing than government, people want more regulation of business

Driven by steep drops in countries in the heart of the eurozone eco-nomic crisis, trust in business fell three points globally to 53 percent. Spain, France, and Germany, down by 21, 20, and 18 points respective-ly (figure 3), weren’t the only mature economies moving squarely into the distruster category. South Korea re-corded a 15-point drop in trust in business (for more on South Korea, see page 6).

In the majority of countries, trust in business held steady, with several countries in Asia staying well above 50 percent – Indonesia (78 percent), Singapore (66 percent) and India (69 percent). The U.S., however, was among the countries where trust did not go above the 50-percent mark.

China was the lone country to see a significant boost in trust in business, rising from 61 percent to 71 percent. The uptick could be attributed to the profitability of state-owned enter-prises and the growth of the coun-try’s auto industry, which is now the largest in the world.

Despite the fact that in all but one of the countries surveyed (Singapore), government leaders are less trusted than their business counterparts to tell the truth (figure 4), nearly half of global respondents still want more government regulation of business.

The regulations they are calling for however, are changes business can step up and implement on its own. Business has the means to act with speed and dexterity to right its own ship, while maintaining the ability to be a force for good and an engine for profit.

Figure 3: Several mature economies see double-digit drops in business trustHow much do you trust business to do what is right?

Figure 4: Government leaders less trusted than business leaders to tell the truthDo you trust leaders to tell you the truth?


“Do not trust them at all”; General Population

N/A N/A

-TrustTrust Steady+Trust-TrustGLOBAL

56%

61%

71% 70%69%67%66%64% 63%

57%

53%

74%

65%

78%

67%

31%

52%

34%

81%

63%

28%

53%

32%

65%62%

80% 81%78% 77%

44%

38%43%

50% 50%54% 54%56% 57%

52%

44%41%41%

53%

50% 47%46%46% 46% 46% 48% 47%

COUNTRIES

2011 2012

GLOBAL

2011 2012

50%

27%

51%

44%

48%

42%

50%

36%

40%38%

23%

13%

34%36%

34%

21%

10% 10%

14%

26%

5%

11%

28%

24%

9%

14%17%

46%

73%

69% 69%66% 66% 65%

60%

53%51% 50%

47% 46% 46% 46%43% 43%

41% 40%

36%34%

30% 29%

24%

17%15%

Business Leaders Government Leaders

% who do not trust them to tell the truth


NGOs Remain Most Trusted Institution Globally, Despite Decline

Media, the only institution to post an increase, benefits from diversification of options

For the fifth year in a row, NGOs are the most trusted institution in the world, and in 16 of the 25 countries surveyed, more trusted than business. Trust in NGOs has reached a record high of 79 percent in China among 35 to 64-year-olds (figure 6). This sig-nals a number of changes taking place within the country, including the evolu-tion of its market. The growth in NGO trust, a by-product of becoming the world’s second-largest economy, also indicates that China’s people and me-dia outlets are breaking long-standing traditions and now relying more heav-ily on non-traditional sources for in-formation. Since 2009, trust in NGOs has surged in India to 68 percent among 35 to 64-year-olds (figure 6).

But some countries are not as trusting of NGOs. In markets that dealt with cri-ses and scandals, such as Brazil (down 31 points), Japan (21 points), and Rus-sia (14 points), NGOs suffered severe drop-offs in trust (not depicted here).

The institution of media rose above 50 percent in trust for the first time and is the only institution the Barom-eter studies that saw an increase (figure 5). Media experienced sig-nificant regional upticks in India (20 points), the U.S. (18 points), the UK (15 points), and Italy (12 points).

As the media landscape continues to dimensionalize and deliver a wider range of options, it is becoming more trusted and valued (for more on the evolution of the media landscape see page 8). The media also did a strong job this past year of covering the financial turmoil throughout the European Union as well as numerous corporate crises, including Bank of America trying to impose a debit card fee, the Netflix/Qwikster snafu, and the India telecoms scandal. Media is also skillfully using social networks to help extend the life of its stories and keep its brands relevant.

Figure 6: NGOs surge in China and IndiaHow much do you trust NGOs to do what is right?

Figure 5: Trust in three of four institutions declines; only media risesHow much do you trust the following institutions to do what is right?


Responses 6-9 only on 1-9 scale; 9 highest; Informed Publics 25-64 and General Population

80%

75%

70%

65%

60%

55%

50%

45%

40%

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 201230%

35%

79%

31%

48%

48%

68%

52%

54%

36%

IndiaChinaU.S. UK/France/Germany

2011 Informed Public 2012 Informed Public 2012 General Public

61%

GOVERNMENT

BUSINESSNGOs

MEDIA

47%53%

56%50%

58%

38%43%

52%46%

52%49%

5

Japan and the Fragility of TrustEarthquake and subsequent nuclear disaster expose weakness of country’s “command-and-control” method of communications and how easily trust can be lost

There is little mystery behind the pre-cipitous drop in trust in Japan, histori-cally a country with steady trust levels. The 8.9 off-shore earthquake that hit the country in March 2011 set off a chain of events, including a nuclear meltdown at the Fukushima power plant, that all but destroyed people’s trust in government, officials, and five major industries. Facing one of its larg-est environmental and political crises ever, Japan failed to deliver the leader-ship and protection its people needed.

Trust in three of the four institutions we survey suffered double-digit decreases for the first time ever (figure 7a). As the nuclear crisis worsened, the govern-ment’s absence of leadership, and the local utility’s poor transparency revealed massive shortcomings in the country’s command-and-control approach to communications. The Olympus Cor-poration scandal also raised concerns about corporate governance in Japan.

Five of 11 major industry sectors saw dramatic drops (figure 7b). Not surpris-ingly, energy suffered the worst blow with a 46-point plunge. In Japan, trust in the media industry tumbled by 21 points, while banks and financial ser-vices fell by 20 and 17 points, respec-tively. Not depicted here is a 17-point decline in trust in the telecommunica-tions sector, which fell to 58 percent.

Trust in credible spokespeople dropped across the board (figure 7c). For government officials it nearly van-ished, dropping from 63 percent to 8 percent. Unlike most other mature markets in which CEO credibility fell but that of regular employees rose, both took a pounding in Japan, drop-ping by 43 points each. Information sources are less trusted too, in par-ticular TV, which dropped by 26 points (figure 7d). Not pictured here, but also recording declines is trust in social- networking and micro-blogging sites. Both enjoyed significant increases in the overall study (figure 13, page 8).

Figure 7: The fragility of trust: Focus on Japan

a) Trust in institutions

b) Trust in industries

c) Credible spokespeople

d) Trust in information sources

Informed Publics ages 25-64

2011 2012

25%

51%30%

51%36%

48%47%53%

GovernmentNGOsMediaBusiness-12 -21 -26

2011 2012

54%

55%

71%

51%

38%

33%

29%

75%

-17

-46

-21

-20

Banks

Financial Services

Media

Energy

2011 2012

NGORepresent.

GovernmentOfficial

FinancialAnalyst

RegularEmployee

A Person Like Yourself

CEOAcademic or Expert

Technical Expert

42%

8%

63%

14%

40%

16%

59%

18%

48%

22%

39%

24%

67%

32%

70%65% -43

-55

-26

-30

-17

-43-38

-23

Magazines

-13

Radio

-13

TV

-16 -26

Newspapers

2011 2012

25%

51%30%

51%36%

48%47%53%

GovernmentNGOsMediaBusiness-12 -21 -26


Banks and Financial Services Remain Least Trusted; Technology on Top for Sixth YearThe financial industry suffers as Europe’s sovereign debt crisis continues

While Japan shows how easy it is to lose trust, the financial sector exempli-fies how hard it is to gain it. As the finan-cial situations around the globe remain bleak, banks and financial services stay the two least trusted industry sectors for the second year in a row (figure 8). On the opposite end of the trust spec-trum, technology, for the sixth con-secutive year, is the most trusted. The steady introduction of more powerful tablets and smart phones has helped keep the tech sector in good stand-ing in both developed markets such as the U.S. and the UK and in develop-ing ones like China and India (figure 9).

The financial meltdown throughout the eurozone has had a particularly nega-tive impact on trust in countries like Germany, France and Spain (figure 9). The persisting negative economic cli-mate is going to make the recovery of trust in that region even more difficult in 2012. A severe loss of confidence in the financial services industry also oc-curred in South Korea where trust fell 25 points. South Korea was the setting for a remarkable slide in trust across every industry sector except automo-tive and technology. A few of the big-gest decreases happened in telecom-munications (down 32 points), financial services (25 points), banks (24 points), and media (16 points). Despite the fact that South Korea was less affected by the global economic downturn, there is still a high level of uncertainty its people are facing. This, along with the intensified polarization of wealth, diminishing disposable income and a hike in consumer prices, could be driving this drastic drop in trust.

In Germany, the energy sector felt the effect of Japan’s nuclear di-saster, recording a 24-point drop in trust, equal only in size to the hit the auto industry took in that coun-try. Energy also saw a steep de-cline in France and South Korea.

Figure 9: Distrust in finance and energy spreads; tech remains stable and strongHow much do you trust the following industries to do what is right?

Responses 6-9 only on 1-9 scale; 9=highest; Informed publics ages 25 to 64

Figure 8: Technology remains on top; finance sector still at bottomHow much do you trust the following industries to do what is right?

Responses 6-9 only on 1-9 scale; 9 highest; Informed Publics ages 25-64 in 20 countries

2011 2012 2011 2012 2011 2012

80%

90%

100%

70%

60%

50%

40%

30%

20%

10%

0%S. Korea S. KoreaSpainFrance FranceGermany GermanyJapan ChinaIndiaUSUK

TechnologyFinancial Services Energy

-15

-20

-24

-46

-25

-26

-32

+10

-18

59%

47%

24%

29%

74%

67%

48%

75%

92%

83%

71%

98%

91%93%

73%73%

19%20%

14%

39%

64%

45%

52%

32%

2011 201279%

Financial services

Banks

Media

Energy

Pharmaceuticals

Brewing and spirits

Telecommunications

Consumer packaged goods

Food and beverage

Automotive

Technology

Financial services

Banks

Media

Brewing and spirits

Consumer packaged goods

Energy

Pharmaceuticals

Food and beverage

Automotive

Telecommunications

Technology 80%

67%

67%

64%

61%

60%

57%

57%

52%

50%

48%

66%

64%

62%

60%

59%

56%

53%

51%

47%

45%

7

Government Officials Now Least Credible Spokespeople; CEOs See Record Drop

Dispersion of authority evidenced in rise in credibility of “person like me” and regular employee

Figure 11: CEO credibility returns to low of 2009If you heard information about a company from a CEO, how credible would that information be?

Figure 10: Credibility of CEOs and government officials plummets; peers and regular employees see dramatic riseIf you heard information about a company from one of these people, how credible would that information be?

“Extremely credible” and “very credible”; Informed Publics ages 35-64

“Extremely credible” and “very credible”; Informed Publics ages 25-64 in 20 countries

As trust in government experienced its biggest decline in Barometer his-tory, so too did the credibility of its officials. Only 29 percent of those surveyed view them as credible. Gov-ernment officials, whose 14-point drop is their largest in Barometer history, are now the least credible spokespeople in the world (figure 10).

In a separate look at how much the general population trusts government and business leaders to tell them the truth, government leaders resound-ingly emerge as the less likely party to be transparent, with 46 and 27 per-cent, respectively, saying “I do not trust them at all” (figure 4, page 3).

Business leaders were not immune to the increasing skepticism. The drop in the credibility of CEOs in ma-ture markets such as the U.S., UK/France/Germany, and South Korea fell more than – or as dramatically as – it did when the recession hit in 2008-2009 (figure 11). Overall, CEO credibility dropped 12 points to 38 percent, its biggest drop in Barom-eter history (figure 10).

As government officials and CEOs become less a source of trusted information, people are once again turning to their peers. “A person like me” has re-emerged as one of the three most credible spokespeople, with its biggest increase in credibil-ity since 2004 (figure 10). Seeing a similar rise in credibility are regular employees, who saw their number jump by 16 points. Smart businesses will take advantage of this dispersion of authority. They will talk to their em-ployees first, and empower them to drive the conversation among their peers about the company and its role in society.

80%

90%

100%

70%

60%

50%

40%

2007 2008 2009 2010 2011 2012

30%

20%

10%

0%

IndiaChinaU.S. UK/France/Germany S. Korea Japan

22%

68%

49% 46%

32% 37%

28%

56%53%

33%

41%37%

63%

83%

59%60%

66%

60%

45%

46%51%

44%

44%

34%

21%

35%

26%

17%

23%

18%

27%

34%

26%

17%

23%

22%

Biggest declinesin Barometer history

Greatestincrease since 2004

Gov’t officialor regulator

68%

66%

65%

50%

50%

46%

38%

29% - 14

- 12

+ 16

+ 22

CEO

2011 2012Academicor expert

Technical expertin the company

Financial orindustry analyst

NGO representative

A personlike yourself

34%

70%

64%

53%

50%

43%

43%

47%

Regular employee Gov’t officialor regulator

CEO

Academicor expert

Technical expertin the company

Financial orindustry analyst

NGO representative

A personlike yourself

Regular employee


Social Media Surges as Skepticism RisesNew media sees biggest rise in trust, jumping by 75 percent

This year’s Barometer once again looks at the number of times peo-ple need to hear something to be-lieve it. Against the backdrop of in-creased skepticism, 63 percent say between three and five times (figure 12), which represents a four-point up-tick over last year. In Japan, which now sits second from the bottom of the Trust Index, the number is 82 per-cent (see page 2 for the Trust Index).

While traditional media sources are still the most trusted, the diversification of trusted media sources continues. In fact, social media, which consists of social networking sites, content-shar-ing sites, blogs, and microblogging

sites, saw the biggest percentage in-crease (75 percent) in trust among me-dia sources (figure 13). Online multiple sources, made up of search engines and news/RSS feeds also saw a jump of 18 percent.

In the U.S., trust in all media sourc-es rose, with major jumps in the per-ceived trustworthiness of television, radio, and newspapers as sources of information about a company (by 23, 13, and 11 points, respectively). In the U.K., those same sources increased by 25, 17, and 17 points, respectively. By contrast, in France and Germany, trust in television news and newspa-pers fell by ten or more points.

China saw double-digit decreases in television as a trusted source, plunging from 74 to 43 percent. Newspapers in that country didn’t fare well either (down by 20 points to 34 percent). But trust in social media jumped: micro-blogging sites and social-networking sites went from virtual distrust at just one percent each to being greatly trusted by a quar-ter (25 percent) and 21 percent, respec-tively – a likely reflection of the rapid growth in social media usage within Chi-na. At the end of 2010, Weibo (the Twit-ter equivalent) had 60 million users. By the end of 2011, 310 million users were on Weibo, which broke major news sto-ries, including the corruption of the Red Cross and a high-speed train crash.

Figure 12: Skepticism requires repetition

How many times in general do you need to hear something about a specific company to believe that information is likely to be true?

Figure 13: People now trusting multiple media sourcesHow much do you trust each of the following places as a source of information about a company?

Informed Publics ages 25-64 in 25 countries

“Trust a Great Deal”; Informed Publics ages 25-64 in 20 countries

35% THREE TIMES (3)

28%FOUR OR FIVE TIMES (4-5)

6%SIX TO NINE TIMES (6-9)

13%TEN OR MORE TIMES (10+)

63% THREE TO FIVE TIMES

14% TWICE (2)

5% ONCE (1)

29%32%

22%

26%

8%

14% 13%16%

+23%+75%

+18%+10%

CORPORATESOCIAL MEDIATRADITIONAL ONLINE MULTIPLE SOURCES

2011 2012

9

Neither Business nor Government Is Meeting Expectations

Wide gap seen between what is considered important for business and government to do and how they are actually performing

In this year’s Trust Barometer, we asked the general population a two-part series of questions to un-derstand the gap between what is important to them and how well busi-ness and government are delivering against that. For business, we looked at 16 attributes that build trust and at eight for government. Both in-stitutions show performance gaps, but the gulf is wider for government, which appears to be falling short on policy and execution. It records

double-digit gaps in environmental protection, sound fiscal management, and frequent and honest communi-cation (38, 46, and 49 percentage points, respectively) (figure 14).

Business, on the other hand, is doing a slightly better job at clos-ing the gap on operational factors like bringing innovative products to the market, and ranking on global best-of lists. The areas in which it has largely fallen short are more so-

cietal in nature. Sixty-four percent say that treating employees well is important to building their trust in a company, but only 27 percent say that business is doing a good job of that. Both business and govern-ment are cited, by a wide margin, for not adequately listening to their primary stakeholders – for busi-ness, there is a gap of 31 percent-age points in this critical behavior; for government it is even greater at 50 percentage points.

Figure 14: Business and government not meeting expectationsHow important are each of the following actions to building trust?

How are companies/government performing on each of the following attributes?

Responses 8-9 only on 1-9 scale, 9 highest; General Population in 25 countries

Company PerformanceBusiness Importance Government PerformanceGovernment Importance

Business GovernmentLISTENS TO CUSTOMERS

HIGH QUALITYPRODUCTS OR SERVICES

TREATS EMPLOYEES WELL

CUSTOMERSAHEAD OF PROFITS

RESPONSIBLE ACTIONS

ETHICAL PRACTICES

TRANSPARENT PRACTICES

COMMUNICATESFREQUENTLY AND HONESTLY

PROTECTS THE ENVIRONMENT

ADDRESSES SOCIETY'S NEEDS

POSITIVE IMPACT ONLOCAL COMMUNITIES

INNOVATOR

REGARDED AND ADMIRED LEADERSHIP

DELIVERSFINANCIAL RETURNS

PARTNERS WITHTHIRD PARTIES

RANKS WELL

67%

67%

64%

62%

62%

61%

60%

57%

55%

50%

49%

46%

41%

39%

38%

36%

-31

-19

-37

-36

-34

-29

-33

-31

-26

-20

-23

-5

-12

-16

-7

-17

36%

48%

27%

26%

28%

32%

27%

26%

29%

30%

26%

41%

29%

23%

31%

19%

PARTNERS WITHTHIRD PARTIES

POSITIVE IMPACT ONLOCAL COMMUNITIES

PROVIDES EMPLOYMENTTRAINING

PROTECTS THE ENVIRONMENT

COMMUNICATES FREQUENTLY

EFFECTIVE FINANCIALSTEWARDSHIP

TRANSPARENT PRACTICES

14%

41%

-27

16%

52%

-36

18%

54%

-36

18%

56%

-38

16%

65%

-49

19%

65%

-46

16%

66%

-50

17%

67%LISTENS TO CITIZENS

-50

Closingthe gap on expectations


The 2012 Trust Barometer’s deep dive into the 16 attributes of trust finds that the factors responsible for shaping current business trust levels (47 percent) are largely tied to busi-ness competence – and that those that will build future trust are more societally focused (figure 15). Lis-tening to customer needs, treating employees well, placing customers ahead of profits, and having ethical business practices are all consid-

New Dynamics in Play to Build Trust in Business

To increase trust levels, a combination of operational and societal factors is required; if done right, business has an opening to move from license to operate to license to lead

ered more important than delivering consistent financial returns – and in-dicate that the path forward entails continuing to do the basics well while also adopting shared values.

As part of the Capitalism in Crisis se-ries in the Financial Times, Vikram Pandit, CEO of Citigroup (disclosure: Edelman client) wrote that the loss

“of trust arose not from a failure of capitalism but from specific failures by certain participants in the finan-

cial system. We could go a long way to regaining that trust by making the system more transparent, by clearing some of the obscurity that causes people to believe the system is a game rigged against their own inter-ests.” * Mr. Pandit was writing about the financial industry, but the same analysis applies to business overall.

* Financial Times Wednesday, January 11, 2012, p. 9 — http://www.ft.com/intl/cms/s/0/90bb724a-3afc- 11e1-b7ba-00144feabdc0.html

Figure 15: Earning the license to lead requires operational and societal attributes

Regression Analysis; Responses 8-9 only on 1-9 scale; 9 highest; General Population in 25 countries

OPERATIONALSOCIETAL

1 Delivers consistent financial returns

2 Innovator of new products

3 Highly regarded, top leadership

3 Ranks on a global list

5 Partners with third parties

1 Listens to customer needs and feedback

1 High quality products or services

3 Treats employees well

4 Places customers ahead of profits

6 Has ethical business practices

7 Has transparent and open business

8 Communicates frequently and honestly

4 Takes actions to address issue or crisis

9 Works to protect/ improve environment

11 Positively impacts the local community

12 Innovator of new products

13 Highly regarded, top leadership

14 Delivers consistent financial returns

15 Ranks on a global list

16 Partners with third parties

10 Addresses society's needs

FROM LICENSE TO OPERATE TO LICENSE TO LEAD

CURRENT TRUSTDRIVEN BY OPERATIONALATTRIBUTES

SOCIETAL ATTRIBUTESMORE IMPORTANT TOBUILDING FUTURETRUST

47% TRUST BUSINESS

BUILDING FUTURE TRUSTCURRENT TRUST

About the Edelman Trust BarometerThe 2012 Edelman Trust Barometer is the firm’s 12th annual trust and credibility survey. The survey was pro-duced by research firm StrategyOne and consisted of 20-minute online interviews conducted from October 10 - November 30, 2011. The 2012 Edelman Trust Barometer online sur-vey sampled 25,000 general popula-tion respondents with an oversample of 5,600 informed publics in two age groups (25-34 and 35-64) across 25 countries. All informed publics met the following criteria: college-edu-cated; household income in the top quartile for their age in their country; read or watch business ⁄ news media at least several times a week; follow public policy issues in the news at least several times a week. For more information, visit http: ⁄ ⁄ www.edel-man.com ⁄ trust or call 212.729.2166. #edeltrust2012

On the cover, from top left: protest in front of Bank of America – Jessica Rinaldi ⁄ Reuters; U.S. President Barack Obama meets with House Speaker John Boehner about U.S. debt ceiling – Yuri Gripas ⁄ Reuters; graffiti ren-dering of logo for Tepco, the Tokyo Electric Power Company, widely criticized for its handling of the disaster at Fukushima – Thierry Ehrmann; “Next stop: Greece” ad on a Washington, D.C. bus shelter, admonishing U.S. to not spend beyond its means – Public Notice Media; protester holds up “We Are the 99%” sign – Jon Silver ⁄ Edel-man; Former Olympus Corp CEO Michael Woodford, who unveiled a major accounting scandal at the company, speaks with reporters – Toru Hanai ⁄ Reuters; French President Nicolas Sarkozy and German Chancellor An-gela Merkel address a news conference following talks at the Chancellery in Berlin – Fabrizio Bensch ⁄ Reuters.

About EdelmanEdelman is the world’s largest inde-pendent public relations firm, with wholly owned offices in 60 cities and 4,000 employees worldwide. Edel-man was named Advertising Age’s top-ranked PR firm of the decade and one of its “2010 A-List Agen-cies” and “2010 Best Places to Work;” PRWeek’s“2011 Large PR Agency of the Year” and “2011 Large UK Con-sultancy of the Year;” EuropeanExcel-lence Awards’ “2010 Agency of the Year;” Holmes Report’s “Agency of the Decade” and“2009 Asia Pacific Consultancy of the Year;” and among Glassdoor’s top five “2011 Best Plac-es to Work.” Edelman owns spe-cialty firms Blue (advertising), Strat-egyOne (research), Ruth (integrated marketing), DJE Science (medical education ⁄ publishing and science communications), MATTER (sports, sponsorship, and entertainment), and Edelman Consulting. Visit http: ⁄ ⁄ www.edelman.com for more information

2012 Edelman Trust Barometer: Executive Summary

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Transcript of 2012 Edelman Trust Barometer: Executive Summary